What banks can learn about CX from tech giants

Customers are in awe of the experience offered by Uber, Netflix, Amazon, and other tech giants — is there something they can teach banks?
27 September 2018

How did Bank of America’s chatbot Erica win over customers? Source: Shutterstock

All things being equal, those that provide the best customer experience (CX) will win.

However, it’s important to note that customers aren’t looking at the CX provided by each industry in isolation. They’re comparing every business to the best reference of CX they have.

Bankers aren’t competing amongst themselves to offer a great CX, they’re competing with everyone — including digital natives such as Uber, Netflix, and Amazon who’ve earned the loyalty of customers by providing a fantastic experience.

According to the new World Retail Banking Report 2018, companies that embrace and leverage disruption seem to win consistently, maintain the loyalty of their customers, and attract new ones.

It makes sense, therefore, for banks to consider best practices from these winning trendsetters and to fold their critical learnings into future-proofing strategies.

In fact, it’s critical to learn from today’s tech giants as the report revealed that nearly a third of retail banking customers today said they would turn to these new-age digital disruptors if they continued to remain dissatisfied with services provided to them.

Here are some key strategies that bankers should give a thought to if they want to stay in the game, delight customers, and win a larger share of the market:

# 1 | Assume a proactive approach

According to the report, it’s interesting to note that disruptors such as Uber, Google, Amazon, and Alibaba proactively approach new technologies and their future potential.

AT&T for example, understands that customers are reluctant to call for support and hence, turned its customer bills into interactive educational videos that pre-emptively answers questions. As a result, it has made many customers very happy.

Misinformation and lack of clarity characterize banking companies — be it the terms of a mortgage or a loan. Proactively answering questions, explaining things, and providing support can help transform the customer experience significantly.

# 2 | Leverage deeper customer insights

When you think of e-commerce giants like Amazon and Alibaba and social media platforms like Facebook and Snapchat, you realize that the key to creating successful products lies in understanding the customer intimately.

Much of their success has been a result of a consistent focus on the customer and their journey, nudging them along, helping them experience and engage with the platform effectively.

Banks, by tracking how customers expect internet and mobile banking interfaces to be, for example, can help build more intuitive solutions that not only meet expectations but also make life more convenient.

JPMorgan Chase, who recently spent about US$20 billion to scale its technology and meet the needs of the next generation of banking, is already seeing a steady rise in active digital and mobile customers.

In Q2 2018, the financial services giant had about 48 million active digital customers, while top competitor Bank of America had 36 million. JPM’s mobile active users also showed strong growth in Q2 2018, jumping 12 percent year-on-year.

# 3 | Reinvent the service model

Modern digital-first e-commerce players are online and always available when you need something. Their service agents don’t sleep one wink and are always attentive to their customer’s needs. Or are they?

Well, in most cases, customers talk to a chatbot — who is capable of handling standard queries about service terms, order details, and standard requests. However, when customers have special needs, they’re directed to human service reps who have more time, energy, and discretion.

When you think of traditional banks, they’re quite heavily dependent on executives providing services to customers. And although quite a few banks have ‘chatbots’ available to customers, they’re not very effective in most cases because they fail to engage with customers effectively.

In this respect, e-commerce bots aside, bankers have a peer to inspire them. Erica, Bank of America‘s chatbot, won the hearts of a million-plus user within a few weeks of launch because it was super easy to use and provided effectively financial advice.